U.S. judge orders RBS unit in Japan to pay $50 mln over Libor

January 06, 2014|Reuters

Jan 6 (Reuters) - A Japanese investment banking unit ofRoyal Bank of Scotland Group Plc was ordered on Mondayto pay a $50 million criminal fine after pleading guilty to wirefraud over its role in manipulating the benchmark interest rateLibor.

RBS Securities Japan Ltd had entered its plea last April 12,as part of its parent's $612 million settlement to resolvecriminal and civil probes by authorities in the United States,the United Kingdom and Japan into rate manipulation.

Libor is also known as the London Interbank Offered Rate. Itis a benchmark for rates on trillions of dollars of mortgages,credit cards, student loans, derivatives contracts and otherfinancial instruments.

In a Dec. 31 joint court filing with the U.S. government,RBS Securities Japan said that from at least 2006 to 2010, someof its traders sought to move Libor in a direction thatbenefited their trading positions. Authorities said this enabledthe traders to profit at the expense of counterparties.

The filing said probes revealed wrongful conduct related toLibor submissions for Japanese yen and another currency thatinvolved about 20 RBS traders, including four at RBS SecuritiesJapan. That unit said it "accepts responsibility" for itsemployees' misconduct.

"Today's sentencing of RBS is an important reminder of thesignificant consequences facing banks that deliberatelymanipulate financial benchmark rates," Mythili Raman, actinghead of the U.S. Department of Justice's criminal division, saidin a statement.

The Justice Department said the $50 million fine and pleawere approved by U.S. District Judge Michael Shea in Hartford,Connecticut. RBS has offices in Stamford, Connecticut.

More than a dozen banks and brokerage firms have been probed worldwide over alleged Libor manipulation. Barclays Plc, ICAP Plc and UBS AG have alsoreached settlements with U.S. authorities.

The case is U.S. v. RBS Securities Japan Ltd, U.S. DistrictCourt, District of Connecticut, No. 13-cr-00073.